Sunday, February 24, 2013

Sunday Morning Links

That and that for your Sunday reading.

- Alex Himelfarb weighs in against gratuitous austerity by pointing out the dishonest cycle of excuses used to push destructive policy:

(T)he consequences of
cuts are increasingly visible, first for the most vulnerable: aboriginal
communities struggling to meet basic needs, higher tuitions and student
debt, refugees who cannot get needed medicine, more unemployed
Canadians thrown onto inadequate welfare because they cannot access
insurance. Some consequences will play out more slowly: weaker
environmental regulations, cuts to education and science, neglect of
crumbling infrastructure, eroding public services will all make our
economy less competitive, less fair, less sustainable. The deeper the
cuts, the more public services erode, the more inequality and poverty
grow, the greater the risks of social disruption and the higher the
political costs. Then what?

The final refuge is to
argue that all the right things have been done and now it’s up to the
market. These arguments are already on the business pages of our media:
when the governor of the Bank of Canada urged business to put some of the cash they were sitting on back into the economy,
the austerians reacted with force. Don’t worry about “dead money,” they
said. Don’t worry about the failure of the corporate sector to turn its
profits — and tax cuts — into job-creating investments. Sounding eerily
like old Communists clinging to the notion of inevitable revolution,
their argument was pure ideology — “it’s only a matter of time,” surely
market forces, as the laws of economics require, will kick in. If there
are inexorable laws of economics that yield jobs and growth from cuts to
taxes and government, it seems somebody forgot to tell business.

- Chrystia Freeland notes that the promise of prosperity out of free trade looks to be similarly empty within one of the largest trade relationships in the world, as the primary effect of increased U.S. trade with China has been domestic job losses:

“U.S.-China trade is almost a one-way street. This trade relationship
doesn’t clearly give you the benefit that you can sell a lot of stuff
to your trade partner,” Dorn said. “If you talk to someone who is
somehow involved in the promotion of free trade, they may say that maybe
the headquarters of Apple (AAPL.O) benefits. That may be true. But the
first-order effect is of job loss.”
...
What is challenging about both of these trends, and what makes the
hollowing out of the middle class a political problem as well as an
economic one, is how different they look depending on whether you own a
company or work for one.

Shipping middle-class jobs to China, or hollowing them out with
machines, is a win for smart managers and their shareholders. We call
the result higher productivity. But, looked at through the lens of
middle-class jobs, it is a loss. That profound difference is why
politics in the rich democracies are so polarized right now. Capitalism
and democracy are at cross-purposes, and no one yet has a clear plan for
reconciling them.

- Meanwhile, Laurie Monsebraaten discusses the plight of the precariat, as roughly half of workers in the Toronto area lack secure employment. And pogge rightly notes that the trend toward instability is part of a conscious set of policy choices aimed at redistributing wealth in the direction of the few at the top:

Governments over the past thirty years or so have increasingly
catered to the corporate agenda while organized labour has been steadily
undermined. Politicians have practically hurt themselves in the rush to
sign on to so-called trade agreements that curtail their own ability to
affect the economy in favour of giving more control to the private
sector. They've either looked on benignly or actively smoothed the way
for employers who want to rely less on full time employees and turn as
many jobs as possible into temporary, contract positions with no
benefits.

Wasn't the state of affairs described in this article the point?
People who feel their economic position is precarious will settle for
lower wages, fewer benefits and more abuse. Their employers can look
forward to bigger profits on which, thanks to those same co-operative
governments, they'll pay lower taxes.

- Finally, the public editor of a Bell-owned paper has concluded that there's no need for any critical look at Bell's motives or choices so long as it proclaims a story to be purely a matter of good news. I for one see no way this philosophy could possibly go wrong.